Singapore banks’ non-performing loans ticked up as ultra-rich homeowners default

Outstanding housing loans grew 6% in September.

Wealthy property buyers who default on their housing loans have caused local banks’ non-performing property loan ratio to tick up from 0.28% to 0.36% between Q1 2014 and Q3 2014.

According to the Monetary Authority of Singapore, this was attributed to a handful of defaults for high-end housing projects.

The property cooling measures have tempered the growth of outstanding housing loans, with y-o-y growth moderating from the peak of 23% in August 2010 to 6% in September 2014.

Here’s more from the MAS:

The volume of new housing loans, which generally tracks housing transactions, contracted from $11.4 billion in Q2 2013 to $6.7 billion in Q3 2014.

New housing loans taken up since the introduction of the various property measures have lower LTV ratios and shorter loan tenures.

The share of new private housing loans with LTV ratios above 70% declined from 77% in Q2 2010 to an average of 65% since 2012.

The average tenure of new private housing loans has also declined, from 30 years in 2012 to 25 years in Q3 2014.

Borrowers taking multiple loans accounted for 15% of all new housing loans as of Q3 2014, compared to 30% in 2011.